10 Lessons On How To Create A Successful Startup

From a bright spark, to setting the world alight: 10 lessons on how to create a successful startup by David Karp, Tony Hsieh, Peter Thiel and others

We often hear about startup success stories, from Mark Zuckerberg who launched Facebook from his Harvard dorm room to David Karp, who created Tumblr from his mother’s apartment.

Creating a startup can be overwhelming and difficult to grasp. What does it take? Here are 10 tips to create your successful startup.

Have a vision for something and a want to create.

David Karp, CEO and founder of Tumblr

Having an innovative idea is only the first step for creating a startup. To be successful, you must be able to lay out a long term plan.

In 2006, David Karp wanted to start a blog to share his thoughts, but the “big empty text box” on services like WordPress was a source of anxiety because he didn’t see himself as a writer. His vision for Tumblr was to abandon the text box and have a button for each type of media. He wanted to democratize blogging. In 2013, Yahoo bought the blogging platform for $1.1 billion! Ten years after Karp’s vision, Tumblr hosts more than 292.7 million blogs and boasts 555 million users each month.

Chase the vision not the money: The money will end up following you.

Tony Hsieh, CEO of Zappos

The main focus should be on the vision of the business you want to build. Picking a topic and defining a time frame allows for an effective organisation that is beneficial to the growth of your startup.

Zappos has been known for its company culture. The whole vision set by Tony Hsieh rests in “delivering happiness to customers, employees and vendors”. In 2009, after Amazon acquired Zappos for $1.2 billion, Hsieh wrote a letter to all Zappos employees to keep the open and honest relationship he built. His goal was to reassure the employees that the acquisition wouldn’t impact in any way Zappos’ initial vision and culture.

Learn from others but maintain a strong independent vision.

Richard Price, founder of Academia.edu

Learning from others’ failures is clearly valuable. But don’t base every decision on people’s experiences, some risk-taking is necessary.

Richard Price had the idea for Academia.edu when one of his doctorate papers took three years to be published. His vision was to make the academic publishing process more efficient. He took a risk by going against the academics’ reluctance to share their work on a public and free platform. Traditionally, to access this type of papers, you must have a university ID or pay for access. Today, it is safe to say that Price won his challenge, Academia.edu is the most wideley used platform to read academic research for free with more than 30 million registered users and 8 million uploaded papers.

Plan while you can, launch as soon as possible, and make changes as you go.

Levi Cooperman, co-founder of Freshbooks

Modelling your business is obviously important, but don’t get stuck at this stage. Try to push it out to your users as soon as you can.

Levi Cooperman founded Freshbooks based on the fact that of 60 million small business in the English speaking world, only 17% were using accounting software. The need being so big, it was unrealistic to try to serve it all. His vision was then to focus on a niche market to try and launch Freshbooks as soon as possible. Today, the company is the first invoicing software for small businesses in the UK.

View your business plan as a game of chess and focus on the long-term vision.

Peter Thiel, co-founder of Paypal

There is no requirement that you need to be the first one entering the market, as long as you play your business strategy right. Peter Thiel explains his “Last mover advantage” theory in his book “Zero to One: Notes on Startups, or How To Build the Future”. The combination of fast data, ample venture capital money, low interest rates, easy outsourced labour, ever- cheaper hosting costs, and improvements in processing power make new companies easier to scale than ever. Companies such as Whatsapp rose to multi-billion valuations in fewer than five years.

Find your niche

Christian Reber, founder and CEO of Wunderlist

Before trying to expand, focus on one specific target. Diversification will come with time.

“I’d say the best advice would be just to get started and once you find something, focus and execute. Don’t try to be everything to everyone right away. If you pick one vertical and do it well, other folks will find you. From a narrow niche of IT professionals who were our early target market, we now have a wide variety of customers.”

When created in 2011, Wunderlist was a Berlin-based startup consisting of a to-do app for PCs and platforms such as Windows, Linux and Mac OS X. In 2015, Microsoft acquired the company and the app has now more than 13 million users and is available from a smartphone, tablet, computer and smartwatch.

Generate some buzz

Jonathan Long, CEO and founder of Market Domination Media

Try to get as much traditional and social media coverage as you can. Some concrete examples: live events, infographics, a Facebook page, an Instagram account, and creating a blog.

Uber understood the value of this tip. Since its creation in 2011, Uber has launched dozens of successful campaigns worldwide. In 2012, the company teamed with Spotify to enable customers to listen to their Spotify playlists while riding. Uber then announced that users in 10 global cities would get the chance to win a ride-along or live session with their favorite singers and celebrities.

Don’t worry about your work/life balance.

Chris Myers, founder of BodeTree

The business you try to create is just part of that life. It doesn’t mean that the startup is the only focus, it just means that the lines get blurred.

Chris Myers explains that founding a startup is not like having a traditional job where you clock in and out. As the CEO of BodeTree, an online platform that helps small businesses automatically organise their finances, he learned that exceptional results require exceptional efforts. Sacrifice is essential to building a successful business. All his dedication allowed him to raise $3.4 million in funding.

Do more with less.

Morgen Newman, founder of IdeaPaint

Limited funds do not have to be a barrier. Be creative in the way you can make things work. The key is to avoid unnecessary expenses by taking advantage of free advertising and marketing.

David Klein, founder and CEO of Commonbound, identified three idea to ponder so you can accomplish more with less.

Capital scarcity is an enabler of resourcefulness and creativity.

Capital scarcity is negotiation’s best friend.

Capital scarcity is a recruiting tool for top talent.

Don’t go at it alone.

Gleb Budman, CEO of Blackblaze

You need to create a close relationship with your team and be clear about your common goals. Building a team is not only about leadership and skills, but also about resources. As your team grows, so will your business and hopefully your revenue.

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“I don’t want to spend an arm and a leg to get this done.”– Luke, Founder and CEO of Happy Clouds LTD

Luke is founder and CEO of Happy Clouds LTD, a cloud service provider for companies of all sizes. He started this business by himself but shortly after took on a co-founder, Lucy. Luke and Lucy have been working together for a year but have yet to set up a shareholders’ agreement.

They have been bootstrapping Happy Clouds’ growth and so have spent the bare minimum. A year on, the business is generating revenue and as the client base grows, Luke and Lucy need to ensure that their business foundations and customers contracts are bulletproof.

Luke and Lucy are fast-paced – they don’t have time to spend explaining their business model to lawyers, they want someone who can quickly understand what they want and run with it. They also don’t want to spend an arm and a leg to get this done.

Luke and Lucy come to Linkilaw. After getting their initial terms of business set out, they realise they also will need another 3 to 4 contracts in the next 12 months.

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“We are scaling up but we want to make sure we get everything updated and in place too.”– Liam, Co-Founder of WineToGo

Liam is the co-founder of WineToGo. His business sources wine from a large network of wine producers and helps their customers select the best wines for their taste to get delivered to their homes. He founded his business with 3 co-founders (Lance, Lily and Larry) and has a shareholders’ agreement in place. The four of them met at university and decided to build their marketplace.

Lance and Larry are passionate about wine and have a background of oenology. Lily is a developer; she built the first platform and collaborated with Liam on business-related matters. They all work in a small office in North London.

After 1.5 years in business, WineToGo features a first selection of 20 UK wine providers and developed its activity in London. However, the business requires funding to expand to the UK (especially Manchester and Birmingham).

Liam and his co-founders are looking towards the future and are happy to get legal advice. They have a focus on investment but also want to explore the possibility of needing future contracts. They plan on having more team members in the near future (business development consultants to prospect wine producers and developers). Liam and his co-founders want to know what to expect and they should have in place for their growing company.

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“My businesses are successful and I want legal services in the long term” – Lynn, Founder of ConsciousDressToImpress.com.

Lynn is a serial entrepreneur who has founded 6 businesses and successfully exited 3 of them. Her sixth and last business is a sustainable fashion brand that retails exclusively online on her website, ConsciousDressToImpress.com.

Lynn is currently generating a stable £4 million a year of revenue and makes between £750,000 and £950,000 of net profit yearly. She really loves being able to bring sustainability and awareness to one of the most polluting and wasteful industries on the market, and now wants to stop building businesses to just focus on this one.

Unlike her previous businesses, Lynn does not want to sell. She wants to stay managing director for the foreseeable future, as ConsciousDressToImpress grants her a job she loves and stable, high income.

Lynn has used Linkilaw previously in her other businesses and loved the work they did for her. It was made easy, accessible, and affordable. She loves being a Linkilaw member because she feels the Linkilaw team is focused on the long-term and on maintaining an honest, professional and friendly relationship with her and her business. Amelie, her dedicated legal point of contact is also a fan of sustainable fashion and loves wearing ConsciousDressToImpress.

PRO MEMBERSHIP

Contracts (drafted by specialist lawyers)

6 contracts

Drafts allowed per contract

3 drafts

Type of communication

Digital + calls

Priority of service

Over non-members and digital members

Speed of contract turnaround

5 working days

Annual business review conference call

Included

Bonus legal advice

30 minutes per contract

£9,000/year or £800/month

“I want a check-up on my contracts and make sure everything is in place.”– Logan, Founder of InvestMap App

Logan created the InvestMap App 5 years ago with one of his long-term colleagues, Lauren. InvestMap is the tool for people who never invested and want to start. Via the app, the consumer learns about how to make wise and long-term beneficial choices; is invited to invest at the right time, and gets updated on the next gold mine.

Logan and Lauren already have a few consultants and their app has been adopted increasingly that it’s now difficult for them to manage their activity with their original team. They now want to implement more structure into InvestMap in order to get more staff and be able to get to the next level.

Logan comes to Linkilaw and expects to review the first contracts that have been drafted when he started his business and get more for his new coming employees. He is very keen on ticking boxes and making sure that InvestMap is secure as it goes on.

It’s been 8 years since Leah created Move.In, selling kits for students moving to another city (including cutlery, first food, sanitary and emergency essentials). Leah started on her own the business but hired 41 employees during these couple of years. She has now 30 employees and operated over the United Kingdom, Germany and France.

With long-term partner contracts who feed her a stable stream of leads, Move.In has established itself as a leader in the market and currently generates over £3 million of yearly revenue. Its growth is also steady (5-10% a month).

Leah is looking for a legal advisor who will take on the role of in-house legal counsel, but without working full-time. She wants to work with someone who knows and understands her business and proposes the most commercially minded decisions. She doesn’t have the budget for full-time legal counsel, but would nevertheless like to have a lawyer she can reach whenever she wants.

Leah was looking for someone who had expertise in both commercial contracts – ensuring she created real win-win situations in her partnerships – and employment – managing employee onboarding documents such as offer letters, employment and option agreements, staff handbook. Leah now works with a dedicated Linkilaw lawyer and is delighted that she is able to work with a senior lawyer at a rate that is significantly under her budget.

PRO MEMBERSHIP

Contracts (drafted by specialist lawyers)

9 contracts

Drafts allowed per contract

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Speed of contract turnaround

7 working days

Annual business review conference call

Included

Bonus legal advice

1 hour per contract

£12,800/year or £1,200/month

“I want to get legal work sorted with a moderate budget.”– Lara, App developer

Lara is an app developer who created custom mobile applications for startups. She often works from her clients’ offices to get immediate feedback on her work. When she’s not working from a client’s office, she works from a co-working space or from a local cafe. Her accountant recently told her she should create a business entity for tax and liability purposes.

Lara’s business is already taking off, so she has a moderate budget to spend on getting her legal work sorted. She knows she wants to incorporate her business, write her own terms of business to use with clients (instead of just accepting the terms they provide her with), and make sure her new website has the documents it needs, but she’s not confident in her legal knowledge. She wants access to legal advice for all the small questions that pop-up day-to-day.

Lara loves working with Linkilaw because her dedicated legal point of contact, Gillian, is knowledgeable, responsive and friendly. She likes that Gillian knows and understands her business and long-term goals. The legal solutions Lara receives from Linkilaw are not only accurate, but they are also commercially-minded and thoroughly thought through.

Lara is grateful to have been introduced to Linkilaw by a friend and she now recommends the Linkilaw membership to her clients.

PRO MEMBERSHIP

Contracts (drafted by specialist lawyers)

3 contracts

Drafts allowed per contract

5 drafts

Type of communication

Digital + calls

Priority of service

Over non-members and digital members

Speed of contract turnaround

7 working days

Annual business review conference call

Included

Bonus legal advice

Unlimited

£4,000/year or £350/month

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